US pre-open: Futures higher ahead of Powell's second day of testimony
By Iain Gilbert
Date: Wednesday 23 Sep 2020
(Sharecast News) - Wall Street futures were pointing to a positive open on Wednesday amid heightened restrictions to stem Covid-19 cases in Europe and an ongoing stalemate in negotiations for a second stimulus bill.
As of 1230 BST, Dow Jones futures were up 0.73%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.38% and 0.13% firmer, respectively.
The Dow closed 140.48 points higher on Tuesday, putting an end to a four-day losing streak.
As lawmakers remained at an impasse on stimulus talks in Washington, Federal Reserve Chairman Jerome Powell warned that the US economy may very well begin to decelerate in coming months if Congress fails to provide further fiscal stimulus to average Americans.
Powell cautioned Congress' select subcommittee that many economic forecasts relied on fiscal action but also sought to reassure market participants that the Fed would support the economy "for as long as it takes".
AvaTrade's Naeem Aslam said: "The Chairman reiterated his uncertain outlook for the US economy and confirmed that the path of recovery is very much dependent on controlling the virus, but he also confirmed that the bank is ready to provide more support if there is any need for it.
"Given the fact that the coronavirus situation is likely to worsen as the flu season kicks in, it is likely that the Fed will have to open the liquidity taps further."
News that British Prime Minister Boris Johnson had moved to tighten economic restrictions and public health measures in the UK as part of an effort to slow the spread of Covid-19 were also in focus after the PM warned the nation had reached a "perilous turning point".
On the macro front, mortgage applications rose 6.8% across the US in the week ended 18 September, according to the Mortgage Bankers Association, while applications to refinance a home loan increased 8.8% and homebuyer mortgage applications advanced 3.4%.
Still to come, July's house price index will be released at 1400 BST and IHS Markit's manufacturing flash PMI for September will follow at 1445 BST.
Federal Reserve chairman Jerome Powell will again testify in front of the Committee on Banking, Housing, and Urban Affairs, while Fed presidents Loretta Mester, Charles Evans and Randall Quarles will all deliver comments throughout the course of the day.
In corporate news, sportswear giant Nike posted better-than-expected earnings overnight, driven by an 82% uplift in digital sales, while Tesla shares were under pressure despite CEO Elon Musk saying he expects full-year vehicle deliveries to increase by 30-40% year-on-year.
Johnson & Johnson shares were also in focus after the pharmaceutical firm launched a global Phase III trial of its Covid-19 vaccine candidate.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN